Bill > S1568

This bill amends the Massachusetts General Laws to exclude from taxable income the discharge of debt on a principal residence, including debt reduced through mortgage restructuring or forgiven in connection with a foreclosure. The exclusion is limited to $2 million of forgiven debt ($1 million for married filing separately), and only applies to "acquisition indebtedness" as defined in the federal tax code. The amount excluded must be used to reduce the taxpayer's basis in the principal residence, and the exclusion does not apply to debt forgiveness due to services performed for the lender or other factors not directly related to the decline in the home's value or the taxpayer's financial condition. The bill applies to discharges of indebtedness on or after January 1, 2013, and the state tax commissioner is required to promulgate regulations to implement the provision.

Budget and Finance

https://malegislature.gov/Bills/190/S1568